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Carmel redevelopment panel approves multi-part bond refunding expected to save millions
Summary
The Carmel Redevelopment Commission approved a multi-part bond refunding package the city expects will realize roughly $8–$12 million in savings, with consultants projecting gross savings of about $18.36 million and net present value savings near $12.3 million. Pricing is targeted for late June with a July 16 close.
The Carmel Redevelopment Commission on Thursday approved a multi-part bond refunding package intended to refinance callable 2016 bonds and capture lower market rates.
Zach Jackson, the city’s chief financial officer and controller, told the commission the refinancing could yield “savings probably ranging from $10,000,000 to $12,000,000,” and that the city plans to prioritize most of those savings in fiscal years 2027 and 2028.
Heidi Amosbaugh of Baker Tilly, the financial adviser on the transaction, presented details of an 18-obligation package and described both gross and net savings figures. “The total overall gross savings is 18,360,000,” she said, and she summarized the package’s net present value savings as about $12.3 million. Amosbaugh said the city will price the bonds in late June and expects to close on July 16.
The package includes a mix of obligations issued in 2016 (property tax and COIT/EDIT-backed qualified obligations), several TIF-supported bonds and two stormwater district bonds that were also part of the refunding group. Amosbaugh said the TIF-supported portion of the refunding would generate roughly $95,000 in annual savings and about 7.5% savings on that piece, while the larger combined package yields the higher gross and NPV figures.
Commissioners asked for detail on the components of the savings. Amosbaugh and other advisers said a meaningful portion of the projected savings comes from releasing debt service reserve funds and surety policies, combined with lower yields in the current market compared with the longer-term coupons issued in 2016. The advisers said they had discussed the structure with S&P to confirm the anticipated removal of certain sureties would not trigger a credit downgrade.
Commission President (Chair) noted the CRC is a relatively small piece of the overall city refunding. Executive Director Metzanski said the commission’s direct benefit would be modest — “about an extra $100 a year” — because most of the refunding affects city obligations beyond the redevelopment commission’s primary debt.
After questions and discussion, the commission moved and approved the separate refunding resolutions presented (the board approved the first portion and then the subsequent lease refunding resolutions) by voice vote.
What’s next: advisers said the financing team will seek ratings and take the negotiated sale to market on the timeline outlined; the commission voted to forward the series as needed for final city and related approvals.
